Xi meets with PLA and PAP NPC delegates; New 24 character formulation; TikTok; US-China
Today’s issue is a little thin; we are in the Two Meetings doldrums.
Summary of today’s top items:
1. Xi meets with PLA and PAP NPC delegates - At the meeting four representatives “spoke in turn on the construction of national laboratories, the capacity building of the national defense science and technology industry, the integrated construction of major infrastructure, the construction of national reserves, border and naval defense work, national defense education and other issues”. In his reported comments Xi discussed the need to “deepen the coordination of scientific and technological innovation, build, manage, and use national laboratories well, and focus on strengthening independent innovation and original innovation, accelerating the promotion of high-level scientific and technological self-reliance and self-strengthening”. He also again spoke of the need to “to speed up the construction of a reserve system and enhance the ability of national reserves to maintain national security".
2. More on the reforms of the State Council institutions - Some commentary and analysis of the reforms, though we are still awaiting many details, and the Party reforms. Spare a thought for financial regulators, many of whom are now facing large pay cuts. Perhaps they are leading the way to common prosperity? In all seriousness, pay cuts, combined with intensified anti-corruption pressures in the system may make for an interesting few months in the financial regulatory sector.
3. Xi’s 24 character formulation 沉着冷静、保持定力, 稳中求进、积极作为, 团结一致、敢于斗争 -Xinhua published a "Study Quick Comment" on the 24 character phrase Xi used earlier this week. Yesterday I briefly discussed this phrase:
the 24 character phrase Xi used in the Monday CPPCC breakout meeting "沉着冷静、保持定力, 稳中求进、积极作为, 团结一致、敢于斗争 "Be calm and maintain determination, seek progress through stability, actively achieve things, unite and dare to struggle". Will this be a new "formulation/体罚" for PRC foreign policy?
It looks like the answer is yes, but it is not just limited to foreign policy, it is more of a general approach across the board. I am open to better translations.
4. US-China - US dropping testing requirements for travelers from the PRC, and the Foreign Ministry is starting to make noises about reports of a Tsai visit to the US next month.
5. PRC papers on US strategy - Jude Blanchette at CSIS is doing interesting work with the "Interpret: China" translation project. He moderated a panel Monday to discuss three papers on US strategy from Chinese experts. I am an advisor to the “Interpret: China” project.
6. TikTok’s US troubles - A new TikTok whistleblower alleges that the company’s claims of separation between Bytedance and TikTok have been misleading, and a Wall Street Journal report on “golden shares” the Party/State is taking in some firms has some interesting details on Bytedance that will probably not help TikTok’s case in the US and some other countries.
Earlier today I published this week’s episode of the Sharp China Podcast. You can listen to it here. From the show notes:
Andrew and Bill begin with the first few days of the Two Sessions and what to make of the messages sent by Xi Jinping and Foreign Minister Qin Gang. Then: Reactions to a few recent columns expressing concern at the bipartisan consensus in DC, a new plan for Chinese data, and the draft budget provides more signs that self-sufficiency is a priority across several sectors in the PRC. From there: Tracing the origins of the United Front Work Department and examining the political uproar in Canada after a series of intelligence leaks regarding allegations of PRC election interference. At the end: Kevin McCarthy’s rumored meeting with Taiwan president Tsai Ing-wen, memories of a visit from Lee Teng-hui in 1995, the Ft. Detrick conspiracy theory that refuses to go away, China’s green energy ambitions, and a slightly different take on corruption.
You can also listen to it in the excellent Substack app, which also doubles as a podcast player:
I will be on a virtual Brookings panel Friday morning to discuss “the recent policy shifts within China, their underlying causes, and potential implications for the future”. You can sign up here to attend. Ryan Hass is the moderator and the other panelists are John Culver, Cheng Li and Emily Feng.
Thanks for reading.
1. Xi meets with PLA and PAP NPC delegates
Xi stresses enhancing integrated national strategies, strategic capabilities-Xinhua
Xi...made the remarks while attending a plenary meeting of the delegation of the People's Liberation Army (PLA) and the People's Armed Police Force, during the first session of the 14th National People's Congress, China's national legislature...
Consolidating and enhancing integrated national strategies and strategic capabilities has profound significance in building a modern socialist country in all respects and advancing the great rejuvenation of the Chinese nation on all fronts, as well as in achieving the goals for the centenary of the PLA in 2027 and more quickly elevating the armed forces to world-class standards, said Xi.
Highlighting the goal of maximizing China's national strategic capabilities, Xi called for efforts in integrating the strategic layouts, resources and strengths in all areas, in a bid to systematically upgrade the country's overall strength to cope with strategic risks, safeguard strategic interests and realize strategic objectives.
Xi urged efforts to advance collaborative innovation in science and technology, with a focus on independent and original innovation, thus building high-level self-reliance and strength in science and technology at a faster pace.
Strategic capabilities in emerging fields must be bolstered in pursuit of new advantages in national development and international competitions, and the resilience of industrial and supply chains must be enhanced, Xi said.
Xi ordered coordinating the construction of major infrastructure, accelerating the building of national reserves, and making the reserves more capable of safeguarding national security.
[视频]习近平在出席解放军和武警部队代表团全体会议时强调 统一思想认识 强化使命担当 狠抓工作落实 努力开创一体化国家战略体系和能力建设新局面
At the meeting, Liu Zegin representative from the Science and Technology Commission of the Military Commission, Rao Wenmin representative from the Equipment Development Department of the Military Commission, Wang Hongyu representative from the National Defense Mobilization System, Tang Linhui representative from the Joint Security Force, Wan Jin Yang representative from the Army, Wang Yaru representative from the Navy spoke in turn on the construction of national laboratories, the capacity building of the national defense science and technology industry, the integrated construction of major infrastructure, the construction of national reserves, border and naval defense work, national defense education and other issues...
会上，来自军委科学技术委员会的刘泽金代表、来自军委装备发展部的饶文敏代表、来自国防动员系统的王宏宇代表、来自联勤保障部队的唐林辉代表、来自陆军的宛金杨代表、来自海军的王亚茹代表依次发言，就国家实验室建设、国防科技工业能力建设、重大基础设施统筹建设、国家储备建设、边海防工作、全民国防教育等方面问题提出意见和建议...
Xi Jinping pointed out that consolidating and enhancing the integrated national strategic system and capabilities is a complex system engineering, which requires overall planning, highlighting key points, and promoting overall progress through key breakthroughs. It is necessary to deepen the coordination of scientific and technological innovation, build, manage, and use national laboratories well, and focus on strengthening independent innovation and original innovation, accelerating the promotion of high-level scientific and technological self-reliance and self-strengthening. It is necessary to accelerate the upgrading of strategic capabilities in emerging fields, seek new advantages for national development and international competition. It is necessary to strengthen the orientation of defense science and technology industry to serve a strong army and win wars, optimize the system layout, innovate development models, and enhance the resilience of the industrial chain and supply chain. It is necessary to strengthen the overall planning and construction of major infrastructure, be good at calculating big accounts, comprehensive accounts, and long-term accounts, and improve the level of joint construction, common use and sharing. It is necessary to speed up the construction of a reserve system for a major country and enhance the ability of national reserves to maintain national security...
习近平指出，巩固提高一体化国家战略体系和能力是复杂系统工程，要统筹全局，突出重点，以重点突破带动整体推进。要深化科技协同创新，建设好、管理好、运用好国家实验室，聚力加强自主创新、原始创新，加快推进高水平科技自立自强。要加快提升新兴领域战略能力，谋取国家发展和国际竞争新优势。要强化国防科技工业服务强军胜战导向，优化体系布局，创新发展模式，增强产业链供应链韧性。要加强重大基础设施统筹建设，善于算大账、综合账、长远账，提高共建共用共享水平。要加快构建大国储备体系，提升国家储备维护国家安全的能力...
Xi Jinping pointed out that this year marks the 80th anniversary of the Yan'an "double support" campaign. We should promote the glorious tradition of supporting the government and cherishing the people, supporting the military and prioritizing the interests of military personnel, and consolidate and develop the unity between the military and the government and between the military and the people in the new era. We should create a strong atmosphere of caring for national defense, loving national defense, building national defense, and safeguarding national defense throughout society, in order to consolidate and improve the integrated national strategic system and capability, and to gather strong forces for promoting a strong military and a strong country.
习近平指出，今年是延安双拥运动80周年。要弘扬拥政爱民、拥军优属光荣传统，巩固发展新时代军政军民团结，在全社会营造关心国防、热爱国防、建设国防、保卫国防的浓厚氛围，为巩固提高一体化国家战略体系和能力、为推进强国强军汇聚强大力量。
Related: Caixin - New Leader Takes Over as Chief of Staff of China’s Military Command
Liu Zhenli has taken over as the new chief of a Chinese military command body similar to the U.S. Joint Chiefs of Staff, state media reported...
He participated in China’s war with Vietnam in 1986 and 1987.
Liu was promoted to the highest military rank of general in July 2021, reportedly becoming the youngest ever to reach the rank at age 56.
Studying Ukraine war, China's military minds fret over US missiles, Starlink | Reuters
A Reuters review of almost 100 articles in more than 20 defence journals reveals an effort across China's military-industrial complex to scrutinise the impact of U.S. weapons and technology that could be deployed against Chinese forces in a war over Taiwan...
Half a dozen papers by PLA researchers highlight Chinese concern at the role of Starlink, a satellite network developed by Elon Musk's U.S.-based space exploration company SpaceX, in securing the communications of Ukraine's military amid Russian missile attacks on the country's power grid.
2. More on the reforms of the State Council institutions
It aims to deepen institutional reform in key areas to make the leadership of the Communist Party of China (CPC) over socialist modernization more sound in institutional setup, optimized in functional allocation, refined in institutional mechanisms, and more efficient in operational management...
Sci-tech innovation lies at the heart of China's modernization drive and must be supported by a sound system. In the face of international sci-tech competition and external containment and suppression, it has become even more urgent for the country to straighten out its sci-tech leadership and administration system, so as to better coordinate forces to make breakthroughs in core technologies and accelerate the realization of greater self-reliance and strength in the field.
The national financial regulatory administration, to be set up on the basis of the current banking and insurance watchdog, will strengthen supervision in different forms, as well as risk management and prevention, to ensure the stable and healthy development of the financial market and better protect people's financial interests.
China’s Financial Shake-Up Shows Policymakers’ Growing Focus on Stability, Risk - Caixin
The new financial regulatory body, which will be directly under the State Council, will absorb the banking and insurance watchdog and take over some functions from the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC), including supervision of financial holding companies, consumer protection, and investor protection. The securities regulator will be elevated to a government agency directly under the State Council.
Although details of the changes have yet to be revealed, the announcement indicates Beijing is shifting its financial regulatory system to a “twin peaks” model similar to that adopted by countries including the U.K. and Australia, according to analysts at Australia and New Zealand Banking Group Ltd. (ANZ) and Citic Securities Co. Ltd.
The twin peaks model divides financial oversight between two specialist regulators — one responsible for maintaining the stability of the financial system and prudential regulation of financial institutions, with the other responsible for oversight of market conduct and consumer protection, including the conduct of financial services firms.
China’s proposed National Financial Regulatory Commission will better tackle lingering issues that threaten to destabilise the economy, ranging from a housing bubble to the unbridled expansion of financial conglomerates, according to Goldman Sachs.
The new watchdog, which will combine the power of the China Banking and Insurance Regulatory Commission (CBIRC) and part of the central bank’s oversight job, will level up regulatory requirements and integrate oversight of conglomerates such as Ant Group and Citic Group, Goldman said.
“We see the proposals as a ‘consolidation’ of financial regulations to strengthen institutional supervision, the supervision of behaviours and the supervision of functions,” Yang Shuo, a Hong Kong-based analyst at the US bank, said in a report on Wednesday. “We expect more measures on liquidity and capital to prevent regulatory arbitrage [by] these financial conglomerates.”
China’s Financial Regulators Face Deep Pay Cuts After Revamp - Bloomberg
Under the shake-up announced on Tuesday, China will set up a new national regulator to oversee all financial sectors except the securities industry. Staff at regulators including the central bank, the foreign exchange regulator, the new authority and the securities watchdog will be paid on par with the nation’s public servants.
That means some officials at the new authority, which will absorb the China Banking and Insurance Regulatory Commission, and the securities regulator could face pay cuts of more than 50%, according to people familiar with the matter, who asked not the named discussing internal information. Currently, China Securities Regulatory Commission and the CBIRC are among rare central government agencies that pay their staff significantly above the compensation of civil servants, said the people.
As a reference, some junior employees with the CSRC currently make about 20,000 yuan ($2,900) a month, with all benefits included, according to a person familiar with the matter. That will likely drop to below 10,000 yuan after the proposed revamp.
Data bureau to help build digital society - China Daily
The proposed bureau, to be administered by the National Development and Reform Commission, will be responsible for advancing the development of data-related fundamental institutions and pushing forward the planning and building of a digital China, the digital economy and a digital society...
Ouyang Rihui, assistant dean of the China Center for Internet Economy Research at the Central University of Finance and Economics, said, "The establishment of a national data bureau will be conducive to building a unified domestic data elements market, bolstering the circulation and transaction of data, and laying a solid foundation for the high-quality development of the digital economy."
3. Xi’s 24 character formulation 沉着冷静、保持定力, 稳中求进、积极作为, 团结一致、敢于斗争
When visiting members of the Chinese People's Political Consultative Conference (CPPCC) from the All-China Federation of Industry and Commerce, General Secretary Xi Jinping summarized the major principles that must be adhered to in the face of complex and severe domestic and international environments using 24 characters: 'Be calm and maintain determination, seek progress through stability, actively achieve things, unite and dare to struggle'. This provides us with the key to overcoming difficulties and achieving new brilliance on our new journey.
“沉着冷静、保持定力，稳中求进、积极作为，团结一致、敢于斗争”，看望参加政协会议的民建工商联界委员时，习近平总书记用24个字概括了面对复杂严峻国内外环境必须坚持的重大原则，为我们在新征程上攻坚克难、再创辉煌提供了制胜秘诀。
In recent years, we have faced various risks and challenges. In the future, we will only face more and increasingly severe risks and challenges. The '24 character formula' is not only a summary of our past successful experience but also a scientific guide for us to continue achieving new victories. By striving to achieve our dreams through hard work and creating miracles through practical actions, we can accurately understand and adapt to changes, maintain strategic composure and firmness, both holding onto our foundation and steadily moving forward, working with unity and striving to achieve progress, and daring to struggle and being skilled in struggling, nothing can stop us from moving forward on our journey."
这些年来，我们面临的各种风险挑战接踵而至。未来一个时期，我们面临的风险挑战只会越来越多、越来越严峻。“二十四字诀”既是我们过去取得成功的经验总结，也是我们继续取得新胜利的科学指引。拼搏成就梦想，实干创造奇迹。新征程上，既准确识变、科学应变、主动求变，又保持战略定力、坚定不移；既守住根基、稳住阵脚，又积极进取、奋发有为；既团结奋斗、众志成城，又敢于斗争、善于斗争，就没有任何东西可以阻挡我们前进的步伐。
4. US-China
White House national security spokesperson John Kirby said Tuesday that the US "respected the one-China policy" and did not want to see a change to the "status quo" of the Taiwan Straits, Reuters reported. Analysts said that McCarthy's provocative actions have made Kirby's words suspicious and brought more concerns to the strained China-US relations.
We are gravely concerned over this and have made serious démarches to the US side demanding clarification, Chinese Foreign Ministry spokesperson Mao Ning said at a press conference on Wednesday.
U.S. Will Lift Covid Testing Requirement for Travelers From China - The New York Times
The Biden administration is planning to end on Friday a requirement that travelers coming from China present a negative Covid-19 test before entering the United States
Question: Will this help resolve the dispute over the restriction on flights between the two countries?
China has always believed all countries should use science-based and proportionate COVID-19 response measures, and wished that related countries would work with China to bring more convenience for Chinese and foreign travelers, Chinese Foreign Ministry spokesperson Mao Ning said at a press conference on Wednesday. ...
When asked for response to the report and if there would be any chance to further increase flights to China, United Airlines told the Global Times on Wednesday in an e-mail that it has no more information to provide but will continue to monitor the discussions between the two governments.
Americans Continue to View China as the U.S.'s Greatest Enemy - Gallup
For the third year in a row, Americans are most likely to mention China as the United States’ greatest enemy in the world today. When asked the open-ended question, 50% of Americans say China is their nation’s greatest enemy, with most of the rest, 32%, naming Russia. North Korea, which was viewed as the greatest enemy in 2018, is now a distant third at 7%.
China open to U.S. commerce secretary's visit: official-Xinhua
"We have noticed relevant media reports but have not received any proposal from the U.S. side on Raimondo's visit to China," the official with the Ministry of Commerce said in response to an inquiry.
5. PRC papers on US strategy
U.S. translation project opens window on China's ambitions, fears - Nikkei Asia
The "Interpret: China" project models itself after how the U.S. sought a laserlike understanding of the Soviet leadership during the Cold War. "All too often we're relying on what others are saying about China, but we want to stop and listen to the discussion, the dialogue, the discourse that's happening within the country," the project's co-director, Jude Blanchette, CSIS Freeman Chair in China Studies, explains on the website.
The database is changing the way analysts discuss China. On Monday morning, CSIS hosted a panel of defense experts, including Elbridge Colby, Bonnie Glaser and Michael Mazarr, and asked the participants to read 87 pages of translated Chinese commentary. Blanchette had chosen three recent Chinese papers on U.S. strategy. He thanked the panelists for doing their "homework" before appearing on the webinar.
Colby, a former Pentagon official, told the panel he was struck by the sophistication and the nuances of the analyses...
Sean Monaghan, a visiting fellow with the CSIS Europe, Russia and Eurasia Program, said he found the papers "mind blowing."
"Naively, I was expecting Sun Tzu and I got Thomas Schelling and Glenn Snyder," Monaghan said, referring to the American game theorist and political scientist, respectively.
"It's interesting and notable that we have a lot of the same reference points. It's reassuring that we're all singing off the same hymn sheet when it comes to understanding what we mean by deterrence, by compellence, coercion."
The documents:
The video:
Related: High Cost of Taiwan Invasion Will Dissuade China, Pentagon Official Says - USNI News
“Deterrence is real; deterrence is strong” today and tomorrow, said Ely Ratner, the assistant secretary for the Indo-Pacific. The United States can likely deter Beijing from attacking the self-governing island 100 miles off the Chinese coast, he said...
Ratner termed what’s happening regionally “as a breakthrough year for alliances and partnerships” in countering China’s military and territorial ambitions. He pointed to Japan’s decision to ramp up defense spending and work on counter-strike weapons, the agreement between the U.S. and the Philippines on establishing four new sites in the island republic for U.S. forces and the progress on the technology sharing agreement between Australia, the United Kingdom and the U.S.
The event, including a full transcript
6. TikTok’s US troubles
Exclusive: Senator's TikTok whistleblower alleges data abuses - Axios
The whistleblower's allegations, which have not been independently seen or verified by Axios, suggest that TikTok overstates its separation from its China-based owner ByteDance, relies on proprietary Chinese software that could have backdoors, and uses tools that allow employees to easily toggle between U.S. and Chinese user data...
The whistleblower told Hawley's office, per the letter: "I have seen first-hand China-based engineers flipping over to non-China datasets and creating scheduled tasks to backup, aggregate, and analyze data," adding that "TikTok and ByteDance are functionally the same company."
China’s New Way to Control Its Biggest Companies: Golden Shares - WSJ
In April 2021, a fund backed by China’s cyberspace regulator took a 1% stake in ByteDance’s main Chinese entity, Beijing Douyin Information Service Co., and named an official to its board. The move, the people said, was partly intended to make sure the government had a say in the fate of TikTok’s algorithm, the video-sharing app’s secret formula for steering content to users. Beijing wants to avoid a sale or transfer of the algorithm. The current ByteDance director named by the cyberspace regulator is an official from its bureau overseeing data security and algorithm governance...
Last year, ByteDance changed the name of several subsidiaries, removing the word “ByteDance,” as it sought to distance the parent company from its units and address U.S. concerns that TikTok could be under Beijing’s control. TikTok has repeatedly denied that the Chinese government would ever get access to its customer data...
The director whom China’s cybersecurity watchdog named to the board of ByteDance’s main subsidiary has veto rights over content on apps including Douyin, the Chinese version of TikTok, according to people close to the subsidiary.
Czech cyber watchdog warns against using TikTok | Reuters
The Czech cyber security watchdog warned on Wednesday against using TikTok, joining a growing number of Western agencies alleging the Chinese-owned social media app poses a security risk.
The NUKIB agency recommended that TikTok should not be installed on phones whose users access critical and other significant infrastructure.
Business, Economy and Trade
China sees surge in entry, exit trips-Xinhua
Immigration authorities across China had handled 39.722 million exits and entries as of Tuesday since Jan. 8 this year, up 112.4 percent year on year, the National Immigration Administration (NIA) said Wednesday...
Immigration authorities across China issued over 3.36 million passports; over 12.67 million certificates for travel between the Chinese mainland and Hong Kong, Macao and Taiwan; and 122,000 visas, stay permits and residence permits for foreign nationals; up 1,220.9 percent, 837.7 percent and 33.1 percent, respectively, compared with the figures before China downgraded its management of COVID-19
China’s Auto Sales Fall Sharply After Lifting of Pandemic Curbs - WSJ China’s passenger car retail sales shrank almost 20% in the first two months of this year, underscoring the challenges facing manufacturers in the world’s largest but long-stuttering auto market. The nation’s auto makers sold 2.7 million passenger cars in January and February combined, according to the China Passenger Car Association, down from 3.3 million a year earlier. The association partly attributed the drop to the ending of tax cuts on autos that boosted sales during the pandemic, as well as the end of electric-vehicle subsidies.
Caixin - Honda and Nissan’s Chinese Partner Slashes Car Prices to Jump-Start Sales While Dongfeng’s discounts could boost its sales in March, such practice will have a negative impact for the broader industry by undermining the current pricing system for new cars, said Li Yanwei, an analyst at the China Automobile Dealers Association (CADA). Actions like Dongfeng’s could lead to cross-provincial purchases and profiteering, and one industry insider even labeled such moves as “regional protectionism.”
Chinese bank earnings threatened by early mortgage payments - Nikkei Asia Bankers are signaling their concern by coming up with strategies aimed at slowing down the repayment rush and keeping mortgages on their books -- at least for a little while longer. "I've not heard of early repayment of similar scale before," said Ding Shuang, chief economist for greater China and North Asia at Standard Chartered. "It will certainly have a negative impact on the banks' revenue."
全文｜新华社国家高端智库发布《迈向现代化强国的发展密码——习近平经济思想的时代特质和实践价值》智库报告-新华网 Xinhua's "High-level Think Tank" has released a 38,000 character report "The development code for a modern and powerful country——The era characteristics and practical value of Xi Jinping Economic Thought".
China property crisis: wealthy eastern city of Changzhou is latest to lift home resale restrictions to boost market | South China Morning Post Changzhou, an affluent city in China’s eastern Jiangsu province, has eased restrictions on the resale of residential property, joining several tier-2 cities in easing curbs to boost demand and breathe life into the struggling market. The change means owners can now put their house on the market once they have obtained their Real Property Ownership Certificate, rather than having to wait two years after purchase, according to a statement by the city’s housing bureau on Tuesday.
In a Chinese Factory Town, Migrants ‘Lie Flat’ for a Better Deal - SixthTone
Compared with earlier generations of migrant workers, today’s young Chinese are less likely to be married and have children. That means they have more freedom to turn down jobs.
The economic fallout from the pandemic, meanwhile, has made working at the workshops less attractive. China’s clothing industry was severely damaged by last year’s lockdowns: An industry survey found that nearly 20% of large-scale factories made a loss in 2022, and their losses rose by an average of over 12% year-over-year.
Wages in the industry have flatlined as a result. Workers in Kangle say that workshops haven’t increased their rates at all since 2019. But the cost of living in central Guangzhou is soaring, with rents in Kangle rising by around 10% a year. Many migrants feel they have little to lose by holding out for a higher wage.
“Refusing to work while the rates are too low is the migrant workers’ way of fighting for more rights,” says Huang Yan, a professor at the South China University of Technology in Guangzhou whose research focuses on labor conditions in China. “But if they keep having no income, there will be a day when they go to work.”
China’s Balance Sheet Challenge - Nicholas Borst | China Leadership Monitor High debt levels and a slowing economy pose growing financial risks to China. After a decade of rapid credit growth, China is now much more indebted than countries at similar levels of economic development. The economic slowdown of the past year, exacerbated by several policy mistakes, has increased pressure on overleveraged borrowers. The most vulnerable borrowers are state-owned enterprises (SOEs), real estate developers, and local government financing vehicles (LGFVs), many of which are in financial distress or are already in bankruptcy.
Weekly: NIO's messy PR 😶🌫️, a $25.9 billion crypto scam 💸, China's answers to Dungeons & Dragons 🎲 | Following the yuan An elderly who didn’t know how to use smartphones, a janitor who didn’t graduate primary school, a retired teacher, these are the victims of a 2020 rug pull of crypto investment app Mark in Suichang, a county in southwestern Zhejiang Province, per a 36Kr investigation. The team behind Mark reaped a whopping 180 billion yuan (US$25.9 billion) across China, and it perhaps partially triggered Beijing to fully ban all crypto transactions in 2021.
Caixin In Depth: Where China’s Insurers See a Booming Business, Regulators See Risks for insurance companies offering insurance + service packages involving senior communities, clouds are looming on the horizon. Draft rules recently sent to insurers by the China Banking and Insurance Regulatory Commission (CBIRC) to address potential business risks could see many locked out of the sector. For the 27 insurers that already offer retirement community options to policyholders, only 10 would qualify to continue with this line of business, sources close to regulators told Caixin. The other 17 may be forced to undergo rectification or suspend the sale of insurance policies linked with elderly care communities.
生猪现货期货价格持续回暖 业内人士：产业行稳致远还需强链补链-证券日报网 Hog futures in China have risen, with Feb contracts surging 18% compared to a month earlier. According to data from the agricultural ministry, pork prices in 30 provinces all rose recently.
新华社评论员：必须更好统筹质的有效提升和量的合理增长-新华网 China should abandon the singular focus on gross domestic product and do away with “speed worshipping,” says a March 8 Xinhua commentary. Still, the article says that a reasonable growth rate must be maintained given that China is still a developing country. 要以新发展理念为指引，告别简单以国内生产总值增长率论英雄，杜绝以牺牲环境为代价去换取一时的经济增长，破除“速度崇拜”“速度焦虑”，注重挖掘长期竞争优势，追求实实在在、没有水分的生产总值，追求有效益、有质量、可持续的经济发展，把推动发展的立足点转到提高质量和效益上来。
Why Li Auto wins out with not-so-superior technology - Baiguan It seems Li Auto's success lies in their keen understanding of consumer preferences in China. Instead of selling a car, Li Auto is actually selling a "space product", a sort of family movie theater cum bedroom on the wheels. And it turns out this is what Chinese consumers actually want.
Perth Mint sold diluted gold to China, got caught, and tried to cover it up - ABC News The historic Perth Mint is facing a potential $9 billion recall of gold bars after selling diluted or "doped" bullion to China and then covering it up, according to a leaked internal report. Four Corners has uncovered documents charting the WA government-owned mint's decision to begin "doping" its gold in 2018, and then how it withheld evidence from its largest client in an effort to protect its reputation.
Yicai - Shanghai Gold Exchange Refutes Report That Perth Mint Supplied It With Diluted Gold Bars A leaked internal report claimed that Perth Mint sold diluted or ‘doped’ gold bars to China and tried to cover it up, facing a potential USD9 billion recall of gold bars, Australian Broadcasting Corp. reported on March 6. The mint began the practice of diluting gold bars by adding impurities in 2018, ABC said.
Yicai Chief Economist Confidence Index Rises to Highest in 20 Months The Yicai chief economist confidence index rose to 52.3 this month, up from 51.3 in February, indicating ongoing positive sentiment with a reading above 50...
Swiss banks say rich Chinese clients worried about sanction prospects | Financial Times Executives at Switzerland’s biggest banks say rich Chinese clients have become much more worried about parking money in the country because of its tough approach to applying sanctions since Russia invaded Ukraine. “We were not just surprised but shocked that Switzerland abandoned its neutral status,” said one board director who oversees Asian operations at his bank. “I have statistical evidence that literally hundreds of clients that were looking to open accounts are now not.”
China’s ‘two sessions’ 2023: Xi Jinping’s call for ‘common prosperity’ risks going unanswered by Covid-weary private firms | South China Morning Post While the government has not yet unveiled a specific tax taking from the rich to compensate the poor, business owners are bracing for a tightening of the tax regime. Quan Heng, party chief of Shanghai Academy of Social Sciences, proposed at the National People’s Congress this week hiking taxes for the rich and lowering them for others as a solution to the problem of wealth inequality, according to an article on the academy’s website on Tuesday.
China’s ‘two sessions’ 2023: Xi Jinping hails role of private firms, but will ‘actions speak louder than words’? | South China Morning Post Zhao Xijun, a finance professor at Renmin University, said the task of boosting the private economy will be divided into more detailed plans and be allocated to specific government agencies for implementation after the conclusion of the annual political gala. “The government’s thinking has already been revealed in the premier’s work report,” Zhao said.
Politics and Law
China weighs 'emergency' fast track for laws as Taiwan tensions mount - Nikkei Asia Proposed amendments to the Legislation Law would let the Standing Committee of the National People's Congress put bills to a vote after just one meeting during an "emergency," shortening a process that usually takes half a year or more. The revisions are expected to pass Monday, the last day of the session, changing the law for the first time in eight years.
Foreign and Defense Affairs
Chinese FM urges S.Korea to refrain from provoking conflicts as Seoul may move to join Quad - Global Times Responding to South Korea planning to "proactively accelerate" its participation in defense pact Quad, the Chinese Foreign Ministry said on Wednesday that the countries concerned should do more that is conducive to regional peace and enhancing mutual trust, rather than provoking confrontation and engaging in small cliques.
Two high-level memos allege Beijing covertly funded Canadian election candidates | Globalnews.ca
The two intelligence reports, from 2019 and 2022, raise questions about what senior federal officials knew about the alleged funding by a foreign interference network and how seriously the Trudeau government took the warnings.
One is a “Special Report” prepared by the Privy Council Office for the Trudeau government and was date-stamped January 2022. The memo was also finalized, suggesting it was intended to be read by Trudeau and his senior aides.
Reviewed by Global News, it asserted that Chinese officials in Toronto had disbursed money into a covert network tasked to interfere in Canada’s 2019 election.
“A large clandestine transfer of funds earmarked for the federal election from the PRC Consulate in Toronto was transferred to an elected provincial government official via a staff member of a 2019 federal candidate,” the PCO report stated.
China has no interest in Canada's internal affairs: foreign ministry - Xinhua
Foreign ministry spokesperson Mao Ning made the remarks at a press briefing on Wednesday in response to a question about Canadian President Justin Trudeau's appointment of an independent special investigator to look into alleged interference in Canada’s elections...
"China has always opposed any country interfering in other countries' internal affairs," Mao said. "We have no interest in and will not interfere in Canada's internal affairs."
It was ridiculous for some people in Canada to spread unfounded rumors and lies and make an issue out of China, she said.
Exclusive: China promises Sri Lanka deal on debt treatment in coming months -letter | Reuters The Export-Import Bank of China has told Sri Lanka it will try to finalise in the months ahead how it treats debt owed by the crisis-hit nation, according to a letter seen by Reuters which also reiterated a moratorium for debt due in 2022 and 2023.
China’s cybersecurity sector advised to build strategically superior capability to deal with suppression of hegemonic powers: CPPCC member - Global Times In an interview with the Global Times on Tuesday, Xiao Xinguang, a CPPCC member and founder of leading anti-virus company Antiy Labs, said that institutions and companies in cybersecurity field in China should work to build strategically superior capabilities so they can properly counter high-level attacks when dealing with attacks from certain states in high-intensity security conflicts.
US muddies water over Nord Stream with vague new intelligence, shows deterrence to allies - Global Times Russia dismissed the credibility of the intelligence and complained that it had been prevented from related investigations. "This is obviously a coordinated spread of disinformation in the media," Kremlin spokesperson Dmitry Peskov told Sputnik. The new intelligence made a splash on social media, yet the majority of readers were not convinced by the new narrative blaming a "pro-Ukraine group."
Biological lab funded by U.S. sparks alarm - China Daily A controversial biological laboratory in Kazakhstan has caused concerns among local residents. The laboratory used to be controlled by the Soviet Union, but now it is funded and built by the U.S. In a suburb near the city of Almaty, Kazakhstan, the Central Reference Laboratory, which opened in 2017, is studying some of the deadliest pathogens that could be used in bioterrorism attacks.
Chinese mining investments in Australia and Darwin Port permutations - Beijing to Canberra and Back The likelihood/near certainty of these kinds of Chinese foreign investment rejections means it’s plausible that developments like the Yuxiao decision were already priced into the relationship. In other words, Beijing’s decision to embrace a warmer approach to Canberra already factored in a certain number of such foreign investment rejections. After all, it would have been pretty strategically inept for China to orchestrate a significant tactical diplomatic shift on Australia only to be forced to reverse course over some foreign investment rejections that were all but inevitable.
A US hidden hand beats drums of war crazily to reverse thaw in China-Australia ties - Global Times
During the Global Times' Global Minds Roundtable discussion on China-Australia Relations on Monday, two former Australian diplomats agreed that the whole of the north of Australia is being militarized by the US at an exponential speed. And "what's happening now inside the Australian military is they have psychologically and mentally handed over to the US," former Australian diplomat Bruce Haigh said during the discussion.
They also agreed that the US is supporting Australia in a possible future war with China. This is exactly what Washington is doing in Ukraine. The US is pursuing its own win-win scenario - debilitating China while avoiding any damage to the US itself, said John Lander, former deputy ambassador to China.
Low-altitude satellite network to be launched - Xinhua Song Xiaoming, president of the CASIC Second Academy, said that China intends to establish a space-based, high-performance infrastructure system for global remote-sensing operations. Remote sensing refers to the process of detecting and monitoring the physical characteristics of an area by measuring its reflected and emitted radiation at a distance, typically from an aircraft or a satellite.
Senior CPC official meets Danish diplomat-Xinhua Liu Jianchao, head of the International Department of the Communist Party of China Central Committee, met with Jeppe Tranholm-Mikkelsen, Permenant Secretary of State for Foreign Affairs of Denmark, in Beijing on Wednesday.
MPs call for UK to ban Chinese gene research firm from government contracts | Politics | The Guardian Rishi Sunak is under pressure to follow the US and bar the Chinese genome research company BGI Group from government contracts as the firm recommitted to continue its work in the UK. MPs on the defence, foreign and health select committees along with former Lib Dem cabinet minister Alistair Carmichael have joined calls for action over fears that the company and others pose a security risk to genetic data in the UK.
Philippines launches strategy of publicizing Chinese actions | AP News
The Philippine coast guard has launched a strategy of publicizing aggressive actions by China in the disputed South China Sea, which has countered Chinese propaganda and sparked international condemnation that has put Beijing under the spotlight, a Philippine official said Wednesday...
“I’d like to emphasize that the best way to address Chinese ‘gray zone’ activities in the West Philippine Sea is to expose it,” coast guard Commodore Jay Tarriela said, referring to China’s use of ostensibly civilian fishing and research vessels to perform military tasks to avoid a military response from rival claimant states.
Hong Kong
Wang Huning hopes political advisors from HKSAR will tell story of One Country, Two Systems well - Global Times The One Country, Two Systems has been distorted and slandered in the past few years by anti-China rioters and secessionist in Taiwan, colluded with the external interference of the US and its alllies, which caused a negative impact on Hong Kong youth generation who lacked recognition on the motherland, some experts said. "Telling the story of One Country, Two Systems well is a part of the national security education, aiming to properly guide their understanding about the country and its political system," Tian Feilong, a legal expert at Beihang University in Beijing, told the Global Times on Wednesday.
Fractured foundations: Assessing risks to Hong Kong's business environment - Atlantic Council This report attempts to provide an objective framework to assess the wager that business conditions for most firms operating in Hong Kong will remain unchanged, despite the dramatic changes that Hong Kong has seen within its legal and institutional infrastructure. The report analyzes in detail the risks to the commercial operating environment in Hong Kong that have emerged since the 2020 introduction of the National Security Law, including currency risks, compliance challenges, threats to judicial independence, access to accurate information, and data security.
Tech and Media
ASML chief warns of IP theft risks amid chip sanctions | Financial Times “Is it going to be easy [for China to develop its own chipmaking equipment]? Absolutely not. Do we have to be highly sensitised on knowhow leakage, on IP leakage? More than ever before.”
Tech war: China-listed unit of server maker Inspur on US trade blacklist changes domicile to a location 2km from parent | South China Morning Post If Inspur Group and its subsidiaries are deprived of chips from Nvidia, AMD and Intel, it would deal a major blow to its business. In its 2019 annual report – the last time it disclosed such information – Intel was the Chinese company’s top supplier, accounting for 37.5 per cent of its total purchases in 2019, while Nvidia was ranked No 2, accounting for nearly 8 per cent of its purchasing budget that year.
Yicai - Meituan CEO Joins Co-Founder's OpenAI-Like Startup Wang Xing, founder and chief executive of Chinese takeout titan Meituan, intends to participate in the Series A fundraising of his co-founder's new startup Guangnianwai Technology. Wang Xing said in a statement on his WeChat today that he will be appointed as director at Guangnianwai
Building a Digital China - by Zac Haluza - Cloudology On February 27, China’s Central Committee and State Council issued its “Plan for the Overall Layout of Building a Digital China.”...The Plan does not propose a radical shift in China’s digital development. Rather, it provides a framework for contextualizing the roles of digital infrastructure, the data economy, and other policy buzzwords from recent years. The Plan clarifies the ideological framing around China’s national digitalization project, and it pairs this framing with concrete targets.
Society, Arts, Sports, Culture and History
China Crackdown on Bride Price Wedding Tradition Aims to Boost Population - Bloomberg It isn’t the first time authorities have taken aim at the practice, which was featured in an annual central agriculture policy document this year for the third consecutive year, but there is now a renewed clampdown as China urgently tries to reverse its demographic decline. A faster-than-expected population drop-off means a shrinking workforce, falling consumer demand and growing strain on the health-care system.